U.S.: Administration Agrees To Ease Restrictions On High Tech Exports

February 02, 2000 00:00 GMT

By Andrew Tully

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U.S.: Administration Agrees To Ease Restrictions On High Tech Exports

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For years, American companies that made computer hardware and software complained that U.S. export restrictions were giving foreign companies a competitive edge. The American government was concerned that valuable technology could fall into the hands of armed enemies. The administration of U.S. President Bill Clinton has finally agreed to ease these rules. RFE/RL's Andrew F. Tully examines Washington's concern about national security, and technology companies' concern about staying on the leading edge of computing.

Washington, 23 February 2000 (RFE/RL) -- Until recently, a computer user in Russia or the Czech Republic could not legally buy -- at any price -- a package of American software utilities that included encryption technology.

The U.S. government considered encryption utilities as weapons -- tools that could empower enemy agents to communicate without interference from American intelligence. As a result, publishers of these programs were closely limited in where they could export the products. Yet these same utilities have long been available to anyone in America -- for as little as $40.

American personal-computer (PC) manufacturers still face similar export restrictions. Government regulators now meet only at six-month intervals to decide which U.S.-made PCs could be widely exported.

That means that if a leading manufacturer introduces a PC with the latest, fastest processing chips, it must wait as long as six months for the government to decide whether its technology was too advanced -- and therefore dangerous -- for unrestricted export.

Because processing power has been advancing rapidly recently, today's leading-edge machine becomes just another home PC in six months' time.

American technology companies complained bitterly about what they called obsolete policies left over from the Cold War. They complained that the restrictions were giving an enormous -- an unfair -- competitive edge to foreign producers that had no such export restrictions. Computer programs from companies in Germany or Israel, for instance, were freely available virtually everywhere. They could even be downloaded conveniently from a company's World Wide Web site.

And the leading U.S. hardware manufacturers complained that even the least-innovative companies -- whether in America or elsewhere -- had an unfair competitive advantage. The so-called "second-tier" companies could wait for the leading manufacturers to spend heavily to design the most technologically advanced PCs, then copy the designs at little cost. By the time the government approved the machines for export, the leaders and the followers would be ready with similar machines. But the "second-tier" companies would have saved millions of dollars on research and development, and therefore were able to offer their exports at more attractive prices.

Last autumn, the administration of President Bill Clinton announced that it was ready to ease many of the restrictions on these exports. The final decisions came last month for encryption software. Earlier this month, the president called for easing restrictions on high-speed computers. Legislation pending before Congress would reduce the review period from six months to 30 days.

Clinton has tried to portray himself as a supporter of free trade. As a result, many observers were baffled as to why he waited so long to act because of the benefits such programs have in conducting commerce on the web.

Alan Davidson is general counsel for the Center for Democracy and Technology, which advocates free speech and other civil liberties. Davidson says the Clinton administration finally realized that individual liberties are fare more important than the government's ability to intercept criminals' messages.

"You can't stop an idea at the border, you can't keep encryption bottled up inside the United States. People were destined to have it all over the world. It's a pretty easy technology to replicate, and it was only a matter of time till it -- till it was out there."

Davidson says the issue is more than one of Americans' right of free speech and commerce. He says that encryption eventually will make the World Wide Web a much safer place for people to do business.

"In the long run, the availability of encryption for people all over the world is actually probably a real step forward for security on-line, and will be a really big part of keeping the Internet secure."

Representative Bob Goodlatte (R-Virginia) is a member of the U.S. House of Representatives, the lower house of Congress. He has been a leader in the move to lift many of the restrictions on technology exports. Goodlatte says this helps computer users in America and elsewhere because it will help them conduct electronic commerce more securely.

"The administration changed its policy -- did a nearly 180-degree change -- which is very, very good, and I'm pleased that the administration has finally headed in the right direction. This is going to be a real benefit to American computer companies, both hardware and software, but most importantly to American citizens and citizens in other countries around the world."

William Reinsch is the U.S. undersecretary of commerce for export administration, and the Clinton administration's leading policy-maker on technology exports. He told RFE/RL that the government did not make what Goodlatte calls a "nearly 180-degree" reversal.

"There's been this sort of revolution, if you will -- or 'quick evolution' might be better -- in the way people think about security. And that, I think, more than anything else has contributed to what you're referring to. But I don't think it's correct simply to characterize it simply as people, you know, reversing their positions."

Reinsch says both the civilian and military branches of the government eventually realized that the best way to keep American companies world leaders in technology is to allow them to export their goods with few restrictions. This, he says, brings them greater profits, which they can then invest in research and development of even greater technologies.